LUSIP: Smallholder Development Model

LUSIP - A Model Public/Private Partnership for Smallholder Development

A real-life example of effective smallholder development, with the support of external funders, government, agricultural development organisations, NGO’s and the private sector, comes by way of the Lower Usuthu Smallholder Irrigation Project (LUSIP) in Eswatini which, at a relatively early point of its development, has already brought about commercial viability to participants in the scheme.

With secured funding and support from the EU and the Swazi government, the LUSIP depended on the building of a R1.4 billion dam to provide enough irrigation water for the agricultural development of 12 000 hectares of land, 5 000 hectares of which was to be ultimately dedicated to sugar cane, under the stewardship of small-scale Swazi farmers.

An important partner to the ambitious plan was Illovo Sugar Africa’s Ubombo mill at Big Bend in the south east of the country which committed to a significant R1.3 billion expansion of its own factory milling capacity and the upgrading of its power plant to produce enough electricity for its own operations and supply the Eswatini national grid on a commercial basis, solely from bio-renewable fuel stock ie bagasse and biomass.

Today, a total of 2 600 hectares of land has been developed to cane by smallholders, collectively organised as associations and comprising around 30 landowners each, with aggregated farming areas of around 100 hectares or more. Together with agricultural expertise and infrastructural support from the local agricultural development agency, Swaziland Sugar Association, Illovo Sugar Africa and other partners, smallholder farmers have seen their holdings turn from desolate brown scrub to rich green fields of sugar cane. At the same time, through extensive training and development offered by the company and the sugar industry, these farmers have developed their agronomic skills commensurately and armed with this knowledge, now tend fertile plots of land under cane, in some cases yielding more than 140 tons per hectare.
Key to the project is the EU and Eswatini government commitment to providing grant funding for the development costs of the land, amounting to around 70% of the total costs. With cane in the ground for collateral, farming associations were able to borrow the balance of the funding required, primarily for crop husbandry costs in the first year to harvesting. The success of the project is measured by the ability of some associations to settle their loans within the first two years of operation, distribute profits among their members and invest in other income generating profits.

The project is a sustainable development initiative which goes well beyond poverty alleviation, contributing handsomely to the socio-economic profile of Eswatini.